UK Stock Market Today (11 December 2025): FTSE 100 Steadies Near Highs as Fed Cut, Oracle Shock and BoE Hopes Collide

The UK stock market traded in a tight range on Thursday 11 December 2025, with the FTSE 100 hovering around the 9,660 mark after an early dip, as investors weighed a rare “hawkish” US Federal Reserve rate cut, fresh jitters around AI-driven tech stocks, and growing expectations of a Bank of England (BoE) rate cut next week. ^[1]

FTSE 100 Today: Flat but Firm Around 9,660

London’s blue‑chip benchmark opened slightly lower, with the FTSE 100 down about 0.1% at 9,642.99 at the open, while the FTSE 250 also slipped modestly and the AIM All‑Share outperformed. ^[2]

As the morning session unfolded, the index clawed back losses. Liveblog updates from London trading desks showed the FTSE 100 edging about 6 points higher to 9,661.91, supported by strength in heavyweight pharma and consumer names. ^[3]

Real‑time European market data showed the FTSE 100 broadly flat to slightly positive, trading just above 9,660 — a whisker from this year’s record territory — while broader European benchmarks such as the STOXX 600 were modestly in the red. ^[4]

That steadiness comes after a choppy week in which:

Tuesday: the FTSE 100 closed almost unchanged at 9,642.01, weighed down by retailers after weak British Retail Consortium data on November sales. ^[5]
Wednesday: stocks in London drifted higher by midday to around 9,656, as investors positioned for the Fed decision and a widely expected 25bp US rate cut. ^[6]

In other words, today’s session is more about digestion than direction: the UK benchmark is consolidating near historic highs rather than breaking decisively one way or the other.

Global Backdrop: A Rare “Hawkish Cut” From the Fed and Oracle’s AI Shock

Overnight, the US Federal Reserve delivered its third consecutive 25‑basis‑point rate cut, taking the federal funds target range down to 3.5%–3.75%. The decision was unusually contentious, with three of the twelve FOMC members dissenting — the most since 2019 — and US President Donald Trump publicly complaining that the cut wasn’t large enough. ^[7]

Markets initially reacted positively: the Dow Jones rose about 1.1%, the S&P 500 gained roughly 0.7% and the Nasdaq added 0.3% on Wednesday, as investors welcomed continued easing despite the Fed signalling only one more cut in 2026. ^[8]

However, that relief rally ran into a wall after Oracle posted quarterly revenues slightly below expectations and flagged heavier‑than‑anticipated capital spending on AI infrastructure. Its shares plunged more than 11% in after‑hours trading, reigniting concerns that the AI boom is becoming increasingly expensive — and potentially fragile. ^[9]

Those worries rippled across Europe on Thursday:

The STOXX 600 slipped around 0.3%, with the European tech sector down nearly 1%.
Germany’s SAP dropped around 2.5%, dragging on the DAX.
In London, the FTSE 100 underperformed US futures, which turned negative as traders reassessed the Fed’s message and AI‑related earnings risk. ^[10]

The key narrative: monetary policy is now less of a tailwind than it looks, and highly‑valued tech names tied to the AI build‑out are increasingly dictating global risk sentiment — including in London.

Big UK Movers: Pharma, Grocers and a “Data‑Centre Drax”

Despite the cautious tone, stock‑specific stories helped keep the FTSE 100 afloat.

Defensive heavyweights lend support

Mid‑morning updates showed:

AstraZeneca climbing about 70p to 13,584p, with demand for the index’s largest constituent giving the FTSE 100 a crucial cushion.
J Sainsbury up around 3.4p to 320.4p after a Citigroup upgrade with a price target of 349p, continuing a strong run for UK food retailers following signs of easing inflation. ^[11]

On the downside:

Associated British Foods (ABF) fell about 2% after going ex‑dividend, showing how mechanics rather than fresh bad news can drag on the index.
Lloyds Banking Group and Marks & Spencer also slipped in early trade, contributing to the slightly lacklustre feel of the session. ^[12]

Drax: from biomass to bits

One of the day’s standout stories came from the FTSE 250, where Drax Group said full‑year earnings would come in towards the top end of market expectations and unveiled plans to convert part of its North Yorkshire site into a 100MW data centre potentially operational by 2027. ^[13]

The stock rose roughly 2% on the day and also featured among the notable risers in pan‑European indices, helped by the prospect of monetising its energy infrastructure for AI and cloud‑computing demand. ^[14]

Housing Chill and Budget Politics: Why Domestic Demand Matters for UK Equities

While global tech headlines dominate, Thursday also brought a very UK‑specific signal: the housing market is slowing again.

A RICS survey released today showed:

The gauge of new buyer enquiries fell to –32% in November from –24% in October, the weakest since September 2023.
The survey covered the weeks around Chancellor Rachel Reeves’ November budget, which introduced a new annual tax on homes worth over £2 million, effective from April 2028. ^[15]

RICS chief economist Simon Rubinsohn warned that the market has been “struggling for momentum for several months”, and that budget changes are unlikely to be a turning point while affordability and high borrowing costs remain major headwinds. ^[16]

For UK equities, this matters in three ways:

Housebuilders and property stocks remain highly sensitive to any sign of cooling demand. We’ve already seen mixed performance from names like Berkeley Group this week, even when earnings hold up, as markets fret about the medium‑term pipeline. ^[17]
Slower housing activity can dampen consumer confidence, affecting retailers, DIY chains and financials exposed to mortgage and equity‑release activity.
It complicates the BoE’s rate‑cut calculus – loosening too slowly risks a deeper property slowdown; loosening too fast risks re‑stoking inflation.

Bank of England: Budget, Inflation and the Coming Rate Decision

Just two days ago, the Bank of England set out early analysis of Reeves’ budget, estimating it will knock 0.4–0.5 percentage points off the annual inflation rate for about a year from mid‑2026, largely thanks to changes to household energy bills and a freeze in fuel duty. ^[18]

The BoE now expects:

Headline inflation, which has already slowed to around 3.6%, to move closer to target over 2026. ^[19]
Reeves’ measures to have a short‑term disinflationary impact, even as other policies — such as higher minimum wages and stronger worker protections — may keep medium‑term cost pressures elevated. ^[20]

Financial markets have reacted by ramping up bets on further cuts:

Market pricing assigns close to a 90% probability that the BoE will cut Bank Rate at its policy meeting next Thursday, potentially to 3.75% from 4.0%, which would mark a sixth cut from the 5.25% peak in 2024. ^[21]

For the FTSE 100:

Banks and insurers are caught between narrower net interest margins and the possibility of a stronger economy if rates fall sustainably.
Utilities, infrastructure and REITs may benefit as discount rates ease, but face the overhang of new taxes and regulatory scrutiny.
Domestic cyclicals (retailers, leisure, housebuilders) are highly sensitive to any signal that borrowing costs could come down more sharply if inflation undershoots forecasts.

The upshot is that next week’s BoE meeting is now the single biggest near‑term catalyst for UK‑focused names, even as global investors fixate on the Fed.

Financial Stability Warnings: AI Bubble Risks and Private‑Markets Stress Tests

Overlaying day‑to‑day trading is a darker theme from Threadneedle Street: the risk that parts of the market have become structurally fragile.

In its December 2025 Financial Stability Report, the BoE warned that:

A multi‑trillion‑dollar, debt‑fuelled AI infrastructure boom is being financed partly through highly leveraged balance sheets and bond markets.
A sharp correction in AI‑linked stocks could erode UK household wealth and feed through to consumer spending.
Losses on lending to AI‑heavy companies could in turn tighten credit conditions more broadly, hitting investment across the economy. ^[22]

At the same time, the Bank announced a system‑wide stress test of global private equity and private credit, focusing on how a major shock would propagate through the UK economy. The exercise will run into 2027 and covers firms responsible for roughly a third of UK leveraged buyout activity and half of private credit in the UK corporate sector. ^[23]

For equity investors, the message is clear:

The risk environment has deteriorated in 2025, even if banks currently look well‑capitalised. ^[24]
Any future volatility in private markets or AI‑linked debt could spill back into banks, insurers, infrastructure funds and even high‑beta UK small‑caps.

That helps explain why, even near record highs, UK equity valuations have not become as stretched as some US tech names — and why the FTSE’s rally still looks more earnings‑ and yield‑driven than speculative.

European Regulation: ECB Simplifies, But Doesn’t Soften, Bank Capital Rules

Adding another layer to financials’ outlook today, the European Central Bank unveiled proposals to simplify bank capital buffer rules without reducing overall capital requirements. ^[25]

Key points include:

Merging multiple capital buffers into just two buckets: a non‑releasable buffer and a releasable buffer that can be cut in downturns.
Combining the counter‑cyclical and systemic‑risk buffers into a single releasable buffer.
Simplifying the leverage ratio framework for banks and potentially allowing a zero buffer for smaller institutions. ^[26]

While the UK is no longer under ECB supervision, UK‑listed banks with major operations across Europe must still factor these changes into their capital planning. The ECB’s message — simplification, not loosening — mirrors the BoE’s own balancing act between supporting growth and avoiding memories of pre‑2008 under‑regulation. ^[27]

Seasonal Tailwind: The FTSE 100’s “Santa Rally” Advantage

Beyond macro and policy, seasonality is quietly on the UK market’s side.

Fresh research summarised by The Armchair Trader using 25 years of data from IG shows that: ^[28]

The FTSE 100 has delivered an average December price gain of about 1.8%, almost double the S&P 500’s roughly 0.9%.
Remarkably, around 90%+ of the FTSE 100’s average annual gains have historically been generated in December alone, versus roughly 15% for the S&P 500.

Analysts caution that investors shouldn’t rely blindly on seasonal patterns — especially in a year where AI, politics and central banks are pulling markets in different directions. But the data helps explain why many strategists still see room for a year‑end grind higher, particularly if:

The Fed signals it is comfortable with incremental cuts in 2026, and
The BoE delivers a rate cut next week without reviving inflation fears.

Index Rebalancing, Dividends and Passive Flows

Beneath the surface, index mechanics and dividend flows are also shaping today’s trade.

FTSE Russell’s December review

FTSE Russell’s indicative December review, based on data as of 21 November, currently points to: ^[29]

British Land being promoted into the FTSE 100
WPP being demoted to the FTSE 250

The actual decision will be confirmed using data at the 2 December close, with changes taking effect after the 3 December rebalance. Even at the indicative stage, such moves can drive flows as active managers and index‑tracking products reposition around expected inclusions and deletions.

ETFs and ex‑dividend effects

Meanwhile, the widely held iShares Core FTSE 100 UCITS ETF (ISF) goes ex‑dividend today, 11 December, for an interim distribution of £0.0528 per share, payable on 24 December. ^[30]

Combined with individual ex‑dividend moves — such as ABF’s 2% drop today — these technical factors can make the FTSE 100 look slightly weaker intraday than the underlying earnings story might suggest. ^[31]

Technical Picture: Consolidation Above Key Moving Averages

Short‑term technical commentary on the UK 100 index (often used as a CFD proxy for the FTSE 100) highlights:

Consolidation after a strong upward rally,
Price still holding above key moving averages, suggesting underlying bullish momentum so long as current support zones near recent highs hold. ^[32]

From a chart‑based perspective, that leaves traders watching:

Support in the low‑9,600s (this week’s pullback range);
Psychological resistance around the 9,700 level and the big round 10,000 mark that some commentators have floated as a possible Christmas target. ^[33]

If incoming macro data (notably UK inflation, US labour numbers and any surprises from Oracle‑style earnings) stays benign, the path of least resistance into year‑end still looks gently upwards — though BoE and Fed communication missteps could quickly change that picture.

What UK Investors Should Watch Next

Looking beyond today’s relatively flat tape, the key catalysts for the UK stock market over the coming days are:

Bank of England rate decision (next Thursday)
- Market‑implied odds strongly favour another cut.
- Tone on inflation risks and growth will matter as much as the move itself. ^[34]
Follow‑through from the Fed and AI complex
- Whether Oracle’s warning sparks a broader reassessment of AI spending, or remains a stock‑specific wobble. ^[35]
UK housing and consumer data
- Further evidence of a slowdown could weigh on retailers, banks and housebuilders, but also strengthen the case for faster rate cuts. ^[36]
Implementation of FTSE index changes and dividend flows
- British Land, WPP and major ETFs like ISF could see elevated trading volumes around rebalance and ex‑dividend dates. ^[37]